Minutes 05-16-2017 - Laserfiche WebLink

Browse Search

19 BACKGROUND: The Orange County Fund Balance Management Policy, adopted on April 11, 2011, states: 1. The County will strive to maintain an unassigned fund balance in the General Fund of 17% percent of budgeted general fund operating expenditures each fiscal year. The amount of unassigned fund balance maintained during each fiscal year should not fall below 8% percent of budgeted general fund operating expenditures, as recommended by the North Carolina Local Government Commission. 2. To the extent that the General Fund unassigned fund balance exceeds 17% percent, the balances may be utilized to fund capital expenditures or pay down outstanding County debt. Staff provided information to the Board on June 16, 2016, September 8, 2016, and May 9, 2017 on the County's General Fund balance policy, best practices, and benchmarking with other peer North Carolina counties. During the September 8, 2016 work session, the Board discussed amending the 17% level to 16.2%. At the May 9, 2017 work session, the BOCC further discussed the unassigned fund balance, a possible revision to the 17% level, and directed staff to schedule additional Board discussion and a potential decision for this May 16, 2017 regular meeting. The Manager's FY 2017-18 Recommended Budget includes a fund balance appropriation of $7,807,696 which was based on maintaining a 17% unassigned fund balance. The 16.2% unassigned fund balance level discussed at the September 8, 2016 work session would result in an additional one-time $1,651,338 for appropriation in the FY 2017-18 Budget and would increase the fund balance appropriation to $9,459,034. There was also discussion at the May 9, 2017 work session on whether a percent change results in material recurring dollar amounts for appropriation in subsequent fiscal years. After additional review of this question, it was determined that there is no material recurring dollar amounts from the percent change. If the Board selects a 16.2% unassigned fund balance level, the Manager recommends that the additional $1,651,338 be used to fund: School Improvements: $1,000,000 (Facility Improvements, Equipment and Furnishings, & Vehicle and Bus Purchases) County Operating Capital: $200,000 Board Amendments: $451,338 Total $1,651,338 FINANCIAL IMPACT: If the General Fund unassigned fund balance level was amended from 17% to 16.2%, an additional $1,651,338 would be available for inclusion in the FY2017-18 budget. Commissioner Marcoplos asked if the growth rate of 2% is a conservative figure. Bonnie Hammersley said the average over the last 5 years has been 1.7 to 2%, anticipating a 1.2% growth rate on property taxes, which is $150 million, and a 4% increase on sales tax, which is $22 million. She said the expenditure rate is growing at about 4%.